We study the impact of learning on the optimal policy and the time-to-decision in an infinite-horizon Bayesian sequential decision model with two irreversible alternatives, exit and expansion. In our model, a firm undertakes a small-scale pilot project so as to learn, via Bayesian updating,...

Economists' view of liquidity is askin to Supreme Court Justice Stewart's View of hard-core pornography: "I shall not ... attempt further to define (it) .... But I know it when I see it". Embedding the process of selling an asset in a search environment enables us to provide an exact definition...